Donald Trump holds a significant stake in Trump Media & Technology Group (DJT), which operates Truth Social, a pro-Trump social media platform.
Trump owns 78.8 million shares in this company, which relies on gathering his supporters to follow his announcements and interact.
Like other stocks, many people buy and sell DJT shares for various reasons. However, an intriguing financial bet stands out: a little-known private financial firm, Austin Private Wealth, reported taking an unusually large short position by buying put options on a nominal amount of 12,000,000 shares.
On July 12, the day before the assassination attempt against Trump, Austin Private Wealth revealed this short position equivalent to 12 million shares, representing about one-seventh of Trump's stake in the company or 16% of all available shares not held by major insiders.
For the uninitiated, put options are financial instruments that allow the holder to receive a payment if the underlying stock price falls below an agreed price (strike price) before a certain date. The lower the stock price falls, the more the holder of the put option earns. With standard contracts of 100 shares, Austin Private Wealth held approximately 120,000 put options, exposing the firm to potential gains related to 12,000,000 DJT shares.
The sudden disappearance of the central figure of Truth Social, Donald Trump, would render DJT shares worthless, offering Austin Private Wealth a huge potential gain, possibly reaching several hundred million dollars depending on the strike price.
This unusual financial bet was initiated before being reported in the 13F filing, which must be submitted after the end of the quarter, referring to the position as of June 30, 2024. Austin Private Wealth is a wealth management firm for affluent individuals, suggesting that this significant position could come from one of their clients or fund managers.
It is also possible that this extremely unusual position is a coincidence, although there are several reasons why Truth Social might not have a bright long-term future. However, the timing of this purchase raises questions. If the assassination attempt had succeeded, Austin Private Wealth would have reaped considerable profits. The only reason Trump is still alive is that he turned his head at the last moment.
Having some experience in options trading, I myself made money with Moderna puts in 2021. People buy and sell options for all sorts of reasons, but Austin Private Wealth's position far exceeds the size of usual speculative positions.
What do you think? Is a huge short position, which would have benefited from a sudden drop in DJT shares, initiated so close to the assassination attempt, just an unrelated coincidence?
https://www.igor-chudov.com/p/a-huge-financial-bet-against-donald